Benzinga | Jul 14, 2020 04:01PM EDT

Diamondback Energy Sees Prelim. FY20 Cash Capex $1.8B-$1.9B



MIDLAND, Texas, July 14, 2020 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ:FANG) ("Diamondback" or the "Company") today provided an operational update for the second quarter of 2020 and announced revised full year 2020 guidance.

SECOND QUARTER 2020 UPDATE

* Q2 2020 average production of 176.3 MBO/d (294.1 MBOE/d). After voluntarily curtailing 9.0 MBO/d (16.1 MBOE/d) of total Q2 2020 production, primarily in May, Diamondback elected to return this curtailed production in June, with nearly all curtailed production back online today

* Q2 2020 average realized hedged prices of $35.21 per barrel of oil, $7.17 per barrel of natural gas liquids and $0.33 per Mcf of natural gas, resulting in a total equivalent price of $22.95 per BOE. Diamondback realized total hedging gains of $211 million in the second quarter, including $11 million of realized gains from the early termination of 10.0 MBO/d of Q3 2020 oil hedges

* Q2 2020 average unhedged realized prices of $21.99 per barrel of oil, $7.17 per barrel of natural gas liquids and $0.63 per Mcf of natural gas, resulting in a total equivalent price of $15.39 per BOE

* Q2 2020 cash CAPEX of $562 million. Q2 2020 activity-based CAPEX incurred of approximately $348 million

* Drilled 58 gross operated horizontal wells and turned 15 wells to production in the second quarter, with nine wells turned to production in April, six in May and zero in June

* After averaging 13 operated drilling rigs in the second quarter with minimal completion activity, the Company is currently operating seven drilling rigs and three completion crews, with the third completion crew having begun operations in July. Drilling activity is expected to be further reduced to six rigs in July

* Assuming a continuation of current market conditions, Diamondback plans to operate between five and six operated drilling rigs and between three and four completion crews for the remainder of 2020

REVISED 2020 PRODUCTION AND CAPITAL GUIDANCE

After taking a significant, nearly three-month break from completion activity versus the Company's original expectations of just over one month, and accounting for higher than expected curtailed volumes in the second quarter, Diamondback is revising full year 2020 production guidance lower than expectations announced earlier in 2020. A summary of revised 2020 production guidance and narrowed activity level guidance is presented below:

* Full year revised 2020 production guidance of 290 -- 305 MBOE/d

* Full year revised 2020 oil production guidance of 178 -- 182 MBO/d

* Q4 2020 production guidance of 170 -- 175 MBO/d (280 -- 290 MBOE/d)

* Full year 2020 cash CAPEX guidance of $1.8 -- $1.9 billion

* The Company expects to drill between 205 -- 215 gross wells and complete between 170 -- 200 gross (153 -- 180 net) wells with an average lateral length of approximately 10,000 feet in 2020

* The Company plans to exit 2020 with 110 -- 140 drilled but uncompleted wells ("DUCs")

* Diamondback believes it can maintain Q4 2020 oil production through full year 2021 with a capital budget 25% -- 35% less than 2020's capital budget